This reality cannot be anyhow extrapolated in any form of theoretical knowledge including the most popular form of compounding interests - the Eight Wonder of the World.

No. You can't!

Embracing Three Taps Solutions to Retirement Income For Life Model

Uncle8888's Wealth's Formula:

Wealth = Asset Value + Cash Flow

Where Sustainable Cash Flow = Tap 1 + Tap 2 + Tap 3

and volatile market pricing of Asset Value becoming less significant.

Since Tap No 3 is enough to supply the liquidity needs; Tap No 1 will remain shut.

Uncle8888's
Tap 1 can sustain up to 2037 and covering up to 89% of his past highest annual household
expenses since 2002 using asset-down strategy when it
is necessary to supplement any shortfall in his Tap 3 (Investment Income)

Now, he will have a peace of mind of passing over these non-market volatile assets to his spouse, an investing idiot.

Happy New Year 2016!With two working adult children and one is doing his NS, 2015 is a special year for Uncle8888 as this is the year that his three children don't eat much of his money. He will be able to estimate how much is the yearly household expenses for a couple like during his retirement.

His household expenses in 2015 has significantly reduced; but next year onward it will re-bound back as his youngest will ORD and continue with his uni study at SUTD.

Work on the LNG FSU conversion for Bumi Armada is scheduled to be
completed in 3Q 2016. Upon completion, the LNG FSU vessel will operate
at the Delimara LNG Regasification Terminal in Malta.

As for the FPSO conversion for Yinson, work is expected to commence
in 1Q 2016. The work scope includes modification work, new equipment
installation complete with associated piping, electrical and
instrumentation systems as well as installation and integration of the
FPSO process topsides. Upon completion, the FPSO will be deployed to the
Offshore Cape Three Point block located in offshore Ghana.

Mr Chow Yew Yuen, Chief Executive Officer of Keppel O&M, said,
"Even in challenging market conditions, we are glad to be the choice
yard for operators. This is the 14th conversion/upgrading project that
we are undertaking for Bumi Armada. It is also their first LNG FSU
conversion project and we are proud to be their trusted partner again.
The confidence shown in us is a reflection of Keppel's proven track
record in delivering quality products competitively, with high standards
of safety and to customers' satisfaction.

"We are also grateful for the opportunity to support Yinson again on a
conversion project. Having worked with them on an FPSO project in 2012,
we will be able to leverage the past experience and close relationship
to fast track this project to meet their requirements."

For MODEC's contract, BrasFELS will be carrying out integration and
commissioning works on the FPSO vessel, Cidade de Caraguatatuba MV27.
Cidade de Caraguatatuba MV27, which is to be deployed in the Lapa field,
Santos Basin, Brazil, will depart from Keppel Shipyard and arrive at
BrasFELS in 2Q 2016. In the past five years, BrasFELS has successfully
completed five FPSO projects safely and ahead of schedule, of which
three were for companies affiliated to MODEC.

For BP's contract, Caspian Shipyard Company will be strengthening the
steel structure of the hull of STB-1 Vessel, a purpose-built jacket
transportation and launch barge. This is the third time that Caspian
Shipyard Company has been chosen to carry out refurbishment or
enhancement works for STB-1 Vessel. Once the hull strengthening work is
completed, STB-1 Vessel will be deployed to transport and launch two
jackets for the Stage 2 development of the Shah Deniz field.

Mr Chow said, "With our wide spectrum of offshore and marine
solutions, we are able to serve the various needs of the industry, be it
in oil production or offshore support services. Leveraging our long
track record in delivering projects on time and within budget, we will
continue building on the good relationships formed over the years with
our existing global network of customers to support them in their
operations."

The above contracts are not expected to have any material impact on
the net tangible assets and earnings per share of Keppel Corporation
Limited for the current financial year.

- End -

CW8888:

New order book in 2015 is lower than in 2008 so this time is worse off.

Nice article from the cyber world:A cruise ship met with an incident at sea, on the ship was a pair of
couple, after having made their way to the lifeboat, they realized that
there was only space for one person left.

At this moment, the man pushed the woman behind him and jumped onto the lifeboat himself.

The lady stood on the sinking ship and shouted one sentence to her husband.

The teacher stopped and asked, "What do you think she shouted?"

Most of the students excitedly answered, "I hate you! I was blind!"

Now, the teacher noticed a boy who was silent throughout, she got him
to answer and he replied, "Teacher, I believe she would have shouted -
Take care of our child!"

The teacher was surprised, asking "Have you heard this story before?"

The boy shook his head, "Nope, but that was what my mum told my dad before she died to disease".

The teacher lamented, "The answer is right".

The cruise sunk, the man went home and brought up their daughter single-handedly.

Many years later after the death of the man, their daughter found his diary while tidying his belongings.

It turns out that when parents went onto the cruise ship, the mother was already diagnosed with a terminal illness. At the critical moment, the father rushed to the only chance of survival.

He wrote in his diary, "How I wished to sink to the bottom of the ocean
with you, but for the sake of our daughter, I can only let you lie
forever below the sea alone".

The story is finished, the class was silent.

The teacher knows that the student has understood the moral of the
story, that of the good and the evil in the world, there are many
complications behind them which are hard to understand.

Which is why we should never only focus on the surface and judge others without understanding them first.

CW8888:

The Moral of The Story from the only student who gave the right answer.

In life, many right answers will be found and come from our own life experience. It is no different from investing. Ask the right person for the right answer. How do they know?

The boy shook his head, "Nope, but that was what my mum told my dad before she died to disease".

Uncle88888 doesn't use any budgeting software. He also dislikes the hassle of tracking every single detail of expenses.

He made his tracking KISS!

He just need to know how much is his cash outflow per month and how much per year and then he will know how much is enough to to reach the edge of his financial independence state and from there how to build sustainable retirement income for life at 2.5% inflationary rate with assets draw-down strategy.

With his Household Expenses Tracking MS Excel worksheet and one dedicated Bank Account to hold all his household expenses, he just needs less than 20 minutes per month to download the bank statement, copy and paste, and then manually update each category of items of expenses.

Saturday, 26 December 2015

Many of us will know how to compute our net worth i.e. Assets and Liabilities.Net Worth = Assets Value - LiabilitiesBut, are you aware of Wealth Formula?

Wealth = Assets Value + Cash Flow

In Uncle8888's Net Worth Balance Sheet, he included another column to capture the cash flow and cash flow yield per annum for each and every asset that is listed in his net worth balance sheet e.g. investment portfolio, CPF OA, SA, RA, FDs, cash, and etc

We will have to manage our future cash flow well to avoid having to sell our assets during market low to meet future liquidity needs.

Once we have locked in negative return through these realized losses; it will become harder for us to break even and recover with a lesser portfolio. Simple Maths!

On Cash Flow

Since every asset in the Balance sheet is tracked for its forecast or estimated cash flow, he will be able to conservatively forecast or estimate his total cash flow over the next 2 to 3 years.

We shouldn't worry too much over asset-draw strategy as we certainly deserve to spend our own money in our lifetime and just leave behind whatever unspent.

He is planning in terms of future Cash Flow for his retirement life without leaving lots of money not spent.The sources of his future cash flow will come from:1) An investment portfolio that is generating just 4% yield p.a. at flat rate and non compounding. It is far better to be conservative when planning for future.2) Yearly partial asset drawn on CPF OA and cash FDs till the last withdrawal on 20363) CPF RA, SA, MA and cash of $XX, XXX as self insured
fund for medical and health care and also covered by enhanced medical
shield. Here he will assume zero interest growth as it is very hard to predict future draw-down and even harder to calculate future interests growth. Zero is an accurate prediction. LOL!4) Leaving behind a fully paid asset called home and investment portfolio for selling as guarantee "profits."Using actuarial present value of his future cash flow (but, excluding the asset value of his investment portfolio and 4-rm HDB flatnear Hougang MRT station) and total liabilities @ 2.5% year inflationary rate.

Now, Uncle8888 has realized during this prolong period of bearish market environment that counting his interests for his non-market volatile assets is not stressful. Bulk of these expected interests can be easily counted during his lifetime.

With the past highest annual household expenses since 2001 is already known, it just required simple Maths to count future interests receivable and assets draw-down to meet the highest expected annual household expenses at 2.5% inflation rate p.a. No other additional or complicated evaluation tool is required.

Currently, his Tap 1 has cash flow capacity to manage up to 89% of his past highest annual household expenses at 2.5% inflation rate p.a. using assets draw-down and future interests receivable strategy.Unless ugly Black Swan happens, it should be quite comfortable for the rest of his lifetime on Earth.

Wednesday, 23 December 2015

When you have plenty of spare money AND you have plenty of time ahead of you AND you are still far away from meeting your final investing goals e.g. level of desired passive income exceeding your annual household expenses.

It is not when?

It is combination of when you have ...., what you have .... and where you are going ....!

All three stars are aligned, it is time to act slowly according to your money management plan and investing goals. It is where you have control of when and not Mr. Market.

In Apr 2004, after hearing the bad news from his doctor, he spent the next few months counting so hard on how much is enough for his family to survive through the next 15 years without too much financial hardship on them.

How much is enough for the next 15 years till kids are independent on their own?

Where are the sources of funding?

With several insurance policies, CPF saving, investment portfolio and a fully paid 4 room HDB flat; the counting of money showed that it was not that bad. His family should be able to "tong" through the next 15 years without too much financial hardship.

In the last few years, he also began to seriously start counting his money but at a more leisure and relax pace. This time, it is not about his family having to survive through financial hardship for the next XX years; it is about how much is enough for his spouse and himself to live comfortably and fulfilling their Bucket List.

This time, he really feels so good and see different life experience in counting money.

Until we can see the face of death more clearly, why so keen in counting money? But, it is better to start counting early as tomorrow may never come!

This is an answer to one Auntie's question on why he is so keen on tracking, updating and counting his money in his Balance Sheet!

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About Me

I am 60+ yrs old uncle living in HDB heartland who has retired @ 60 on 30 Sep 2016.
I have been doing long-term investing and short-term trading in Singapore stock market only since Jan 2000 and now becoming full-time retail investor. So I am that Panda or Koala in the investment world; but I am still surviving well in the wild.
I have two sons and one daughter; two working adult children and the youngest son is currently in his 1st year SUTD.
I am currently executing my Three Taps solution model to maintain sustainable retirement income for life till 2038
Cheers!
Last updated: 16 Oct 2016

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